CBI: "Britain needs a pro-enterprise government"

CBI Director-General Carolyn Fairbairn writes in The Telegraph about what CBI members are telling her about the business priorities for the next government.

With party manifestos out this week, this is a vital moment in the election campaign. The CBI and firms across the UK are clear: we must work together with the new government on a pro-enterprise agenda to make the most of the opportunities ahead. The UK needs to be a great place to do business.

An open economy, the discipline of competition and free trade have served the UK well over the past four decades. This is Brand UK – admired around the world and a magnet for people and investment. It’s time to build on it with ambition and new ideas.

But the smoke signals coming from the political parties are mixed. Suggestions of limits on migration, price caps in the energy market, nationalisation and tax rises do not signal the confidence in enterprise that’s so urgently needed. This matters – the world is watching.

Firms, like people, are not perfect. But they are a powerful force for good. British companies provide four in every five jobs in the UK and have created two million new ones since 2012. Their enterprise has made the UK the fastest growing G7 economy in 2014 and again last year. UK based firms paid £205 billion in tax last year, a quarter more than five years ago and enough to more than cover public spending on the NHS and education combined.

I have just come back from two days with over 50 firms in the South West, in sectors from rubber tubing and yoghurt to logistics and fruit juice. They are not interested in political ideology, but in the practicalities of how they grow and thrive. Three things matter most. First, a predictable environment where rules and tax stay stable. Second, the ability to attract the people they need. And third, a new and good deal with the EU as soon as possible.

It is employers like these who hold the solutions to improving people’s lives and creating a better and fairer economy. We need the next government to back them.

Firms need to keep their part of the bargain, with high standards of corporate governance and conscientious employment practices and they must keep pace with public expectations and follow the spirit, not just the letter, of the law. But it’s important to remember that the vast majority are good and fair employers.

The CBI’s General Election business manifesto outlines the commitment of firms to backing Britain and changing lives for the better. But this is only possible if all political parties commit to a pro-enterprise agenda. This means an open economy, a migration system that supports growth, and a stable tax and regulatory environment.

The new government must implement an ambitious, long-term industrial strategy that builds the skills and infrastructure the UK so badly needs, and the world class innovation of which we’re capable. This is the way to address the massive productivity differences and inequalities across our country, not a stifling new era of regulation and state control.

Many of the foundations already exist. British universities are already anchors of regional enterprise – witness the clusters of technology firms around university towns. Companies spend more than the UK’s entire secondary schools budget on training their employees.

But despite this, significant skills shortages exist. In Birmingham engineers are scarce, in the North West it is in digital and life sciences, in the West Country it is in thriving food and drink firms. Despite companies investing more in their people, these shortages will increase if the next government closes the door on overseas skills and labour.

It is right that the UK takes control of immigration to address public concerns. However, the starting point must be the right outcomes for people and communities, not a single, blunt target. Employers are committed to training our next generation, but it will take time and this should be recognised in any future policy.

Infrastructure is vital. From the roads and railways that connect communities, to the energy for homes and factories, good infrastructure enables businesses to thrive in cities and villages alike. The CBI has worked with its members to identify priorities by region – and whoever arrives in Downing Street on 9 June will receive a list that very morning.

The UK’s track record on innovation is excellent. Take SPTS, based in Newport, which supplies technology to smartphone manufacturers across the globe. Businesses like these turn innovation into jobs across the country. Yet the UK invests less in innovation than many other advanced nations. The CBI has called for current public and private investment to rise to the 3% of GDP by 2025.

Skills, infrastructure, innovation. Three areas where the new government must back Britain’s prosperity. Three areas in which business can repay investment. Three ways to reduce regional inequality – with potential economic benefits worth over £200 billion during the next decade alone.

There will be tricky corners, such as securing a trade-friendly, talent-friendly Brexit, but employers – and the CBI – are ready to crack on.

This is the value of a pro-business agenda. It will help us on our journey to becoming the most competitive and prosperous economy in the world, rich in opportunity from coast to coast.

There has never been a more important time for a pro-enterprise government to back business to back the UK.